“The Aftershock of 2011 in 2014”
by Josh Wheeler East Asian Social Political Analyst.
The prediction is clear that everyone in Japan is gearing up for a big increase. People are rushing to get some last minute thing they’ve been holding out for buying, but with a 3% across the board consumption Tax on the horizon, anything will be a bargain come before April.
They call this “Abenomics”, but the truth is that it should be called “Abe’s chase all the mice out with a tax scare and corner them. By placing the tax hike in April (The beginning of the Japanese tax calendar) he sets it as new policy for the coming Tax year. People have some time to consider it, but not much because it’s already passed into law. Shouganai…
Abe has pulled a bait and switch where people on the fence about buying big purchases quickly jumped off the fence either in the BUY column or the DONT BUY column and Abe was betting on BUY. A seriously risky move and a sleazy one too. People are on the fence because they must consider the future. Do I save for the future now? or buy this thing or that thing? They know they don’t NEED that new DSLR Camera or Mac Book Pro or iPod, but Abe has forced us to choose.
I’m admittedly against scare tactics because it was not what NEO-Conservatism needed repeating. It worked in the United States because the masses who believed it also believed in GOD. God offers a method of dealing with one’s financial problems during a recession. Japan needs a hope to believe in and few things are lasting to keep hopeful in. Abe wanted to pair this with some old Japanese “let’s stick in there” but it doesn’t appeal the younger crowd who are facing a tough job market already.
When Americans think about the 2008 recession and shock they think of it in the past, but it’ll shortly be present here. Abe has survived earthquake scandal that distracted everyone for two years, has come back from political doom and captivated the nation by his nationalistic wizardry. I believed back in 2008 after being in Japan when Abe was first elected and how people really loved his character, but his manifesto was too extreme. Japan needed time to move out of the “90’s political mindset” and move into the 2000’s. This is good news because as I remember how it was in the US is that people began to wake up and protest the government. Japan has been rattled by storm, earthquake, blizzards, Recessions, Shocks, and more and endured and if all there is to do is ganman then ganmanmonai.
In the near term this will choke the economy and people will either save the economy through fear or we face a massive price hike in May, followed by huge drop in sales by June. The only logical reaction will be to double price everything then offer half-off 3 for 1 deals or any other coupon based method to lure customers back in. Short inflation then long deflation. This will force companies to find ways to either tighten their belt or lay off some staff. It’ll be batten down the hatches and don’t hire until June. This isn’t the way to bounce the economy. March’s sales might be up and that’ll be hailed as success, but it’ll be very short lived as the roller-coaster loops.